KENNAMETAL INDIA 2022-23 Annual Report Analysis

Mon, 4 Mar

KENNAMETAL INDIA has announced its results for the year ended June 2023. Let us have a look at the detailed performance review of the company during FY22-23.

KENNAMETAL INDIA Income Statement Analysis

• Operating income during the year rose 8.7% on a year-on-year (YoY) basis.
• The company's operating profit decreased by 15.5% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 14.0% in FY as against 18.1% in FY.
• Depreciation charges increased by 9.0% increased by 0.0% YoY, respectively.
• Other income declined by 41.5% YoY.
• Net profit for the year declined by 23.1% YoY.
• Net profit margins during the year declined from 11.5% in FY to 8.1% in FY.

KENNAMETAL INDIA Income Statement 2022-23

No. of Mths Year Ending		12 Jun-22*	12 Jun-23*	% Change
Net Sales	Rs m	9,907	10,771	8.7%
Other income	Rs m	94	55	-41.5%
Total Revenues	Rs m	10,001	10,826	8.2%
Gross profit	Rs m	1,789	1,512	-15.5%
Depreciation	Rs m	357	389	9.0%
Interest	Rs m	0	2	0.0%
Profit before tax	Rs m	1,526	1,176	-22.9%
Tax	Rs m	385	299	-22.3%
Profit after tax	Rs m	1,141	877	-23.1%
Gross profit margin	%	18.1	14.0
Effective tax rate	%	25.2	25.4
Net profit margin	%	11.5	8.1

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KENNAMETAL INDIA Balance Sheet Analysis

• The company's current liabilities during FY down at Rs 2 billion as compared to Rs 2 billion in FY, thereby witnessing an decrease of -13.0%.
• Current assets rose 1% and stood at Rs 5 billion, while fixed assets rose 7% and stood at Rs 7 billion in FY.
• Overall, the total assets and liabilities for FY stood at Rs 12 billion as against Rs 11 billion during FY, thereby witnessing a growth of 4%.

KENNAMETAL INDIA Balance Sheet as on June 2023

No. of Mths Year Ending		12 Jun-22*	12 Jun-23*	% Change
Networth	Rs m	6,452	6,874	6.5
Current Liabilities	Rs m	1,759	1,531	-13.0
Long-term Debt	Rs m	0	0	0.0
Total Liabilities	Rs m	11,326	11,833	4.5
Current assets	Rs m	4,786	4,847	1.3
Fixed Assets	Rs m	6,540	6,986	6.8
Total Assets	Rs m	11,326	11,833	4.5

KENNAMETAL INDIA Cash Flow Statement Analysis

• KENNAMETAL INDIA's cash flow from operating activities (CFO) during FY stood at Rs 1 billion, an improvement of 135.8% on a YoY basis.
• Cash flow from investing activities (CFI) during FY stood at Rs -453 million on a YoY basis.
• Cash flow from financial activities (CFF) during FY stood at Rs -447 million, an improvement of 15% on a YoY basis.
• Overall, net cash flows for the company during FY stood at Rs 258 million from the Rs -654 million net cash flows seen during FY.

KENNAMETAL INDIA Cash Flow Statement 2022-23

Particulars	No. of months	12	12	% Change
	Year Ending	Jun-22	Jun-23
Cash Flow from Operating Activities	Rs m	491	1,158	135.8%
Cash Flow from Investing Activities	Rs m	-619	-453	-
Cash Flow from Financing Activities	Rs m	-526	-447	-
Net Cash Flow	Rs m	-654	258	-

Current Valuations for KENNAMETAL INDIA

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 39.9, an decline from the EPS of Rs 51.9 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 2,647.1, stands at 66.3 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 8.5 times, while the price to sales ratio stands at 5.4 times.
• The company's price to cash flow (P/CF) ratio stood at 40.8 times its end-of-year operating cash flow earnings.

Per Share Data/Valuations

No. of Mths Year Ending		12 Jun-22*	12 Jun-23*
Sales per share (Unadj.)	Rs	450.7	490.0
TTM Earnings per share	Rs	51.9	39.9
Diluted earnings per share	Rs	51.9	39.9
Price to Cash Flow	x	27.6	40.8
TTM P/E ratio	x	36.2	66.3
Price / Book Value ratio	x	5.9	7.5
Market Cap	Rs m	38,134	51,679
Dividends per share (Unadj.)	Rs	24.0	20.0

Ratio Analysis for KENNAMETAL INDIA

• Solvency Ratios

Current Ratio: The company's current ratio improved and stood at 3.2x during FY, from 2.7x during FY. The current ratio measures the company's ability to pay short-term and long-term obligations.

Interest Coverage Ratio: The company's interest coverage ratio improved and stood at 589.0x during FY, from 0.0x during FY. The interest coverage ratio of a company states how easily a company can pay its interest expense on outstanding debt. A higher ratio is preferable.

• Profitability Ratios

Return on Equity (ROE): The ROE for the company declined and down at 12.8% during FY, from 17.7% during FY. The ROE measures the ability of a firm to generate profits from its shareholders capital in the company.

Return on Capital Employed (ROCE): The ROCE for the company declined and down at 17.1% during FY, from 23.7% during FY. The ROCE measures the ability of a firm to generate profits from its total capital (shareholder capital plus debt capital) employed in the company.

Return on Assets (ROA): The ROA of the company declined and down at 7.4% during FY, from 10.1% during FY. The ROA measures how efficiently the company uses its assets to generate earnings.

Key Ratio Analysis

No. of Mths Year Ending		12 Jun-22*	12 Jun-23*
Current ratio	x	2.7	3.2
Debtors’ Days	Days	50	48
Interest coverage	x	0.0	589.0
Debt to equity ratio	x	0.0	0.0
Return on assets	%	10.1	7.4
Return on equity	%	17.7	12.8
Return on capital employed	%	23.7	17.1

To see how KENNAMETAL INDIA has performed over the last 5 years, please visit here.

KENNAMETAL INDIA Share Price Performance

Over the last one year, KENNAMETAL INDIA share price has moved up from Rs 2,064.3 to Rs 2,170.0, registering a gain of Rs 105.7 or around 5.1%.

Meanwhile, the S&P BSE CAPITAL GOODS Index is trading at Rs 34,369.7 (up 1.2%). Over the last one year it has moved up from 27,506.0 to 34,369.7, a gain of 6,864 points (up 25.0%).

Overall, the S&P BSE SENSEX is up 1.8% over the year.

(To know more, check out historical annual results for KENNAMETAL INDIA and quarterly results for KENNAMETAL INDIA)